Home Insurance: Earthquake Protection

Home insurance is something every homeowner should have. There are various types of coverage for any given risk. One of the typical risks faced by homeowners in certain parts of the country is that of damage from earthquakes. Levels of coverage, rates and deductibles are discussed below.

What is Earthquake Insurance?

As mentioned above, earthquake insurance offers coverage if your home is subject to earthquake damage. Most standard homeowner insurance does not include coverage for damage caused by earthquakes. By purchasing this type of coverage, a homeowner who lives in an area where the risk of earthquakes exists can be protected from major loss due to damage.

How Does Earthquake Home Insurance Work?

Because this type of insurance provides coverage for catastrophic damage, the deductibles can be quite high. Typically, the deductible on an earthquake insurance policy represents a percentage of the value of the property.

About Coverage

A “mini-policy” can provide a level of coverage that will keep a homeowner under shelter while excluding non-essential components of said property. This type of policy helps keep premiums more affordable while still providing protection.

Certain quakes are not covered under earthquake insurance policies. These include quakes that took place prior to the purchase of said policies. It is important to read a policy carefully before purchasing earthquake insurance.

There are several different factors you should consider when evaluating how much coverage to purchase. First, take into account the number of possessions in your home and calculate their value. Would you be able to replace or live without them if they were damaged or destroyed in a quake? Next, consider where you would stay if you were temporarily displaced from your home as a result of earthquake damage. How much could that cost? Next, consider the potential amount required to repair or rebuild your home. It is difficult to estimate how much insurance claim money you could expect to need in any given disaster, so you must also evaluate your level of comfort with risk.

Earthquake Insurance Carriers

California, Oregon and Washington are states where earthquake insurance is most frequently purchased. In California, some of the most prominent carriers are the California Earthquake Authority and the private carrier Geovera. Both of these carriers specialize in earthquake insurance. In Oregon, American Family Insurance offers a rider on their homeowners policy at a 15% minimum deductible. Geovera also offers earthquake insurance in Oregon. In Washington state both State Farm and American Family Insurance offer a rider on their homeowners policy at a 15% minimum deductible. Geovera also provides earthquake policies in Washington.

If you live in a state where earthquakes pose a significant risk, it is important to assess what your loss tolerance is and evaluate whether earthquake insurance could help you mitigate the damage from loss of property. Comparing insurance carriers and asking lots of questions will help you make the best choice when buying a policy. Make sure you understand the amount of coverage you are purchasing and that you know exactly how to file a claim in the event of an earthquake emergency.